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Comment Amartya Sen William Vickrey has presented a penetrating analysis of the U.S. fiscal system related to philanthropy and has made a number of well-argued suggestions for reform. 1 have only a few comments. First, the opaqueness of the tax refund system may, in fact, be part of its attraction to donors in so far as a relatively small net contribution is made to look like a much larger donation. This fact would not affect ViCKrey's expectation that a tax reform which makes things less opaque should, if implemented, increase total donation, but it is of relevance in explaining the continuation of the present tax system and the pressures that are likely to counteract Vickrey's reform scheme. It seems useful to distinguish between the normative question of the desirability of a tax system and the empirical question of the genesis and survival of that system. Vickrey's attention is concentrated on the former, perhaps appropriately for this conference, but the political questions surrounding the growth and persistence of the current system in America would have to be studied in the context of the possible implementation of the Vickrey reforms. Second, on the subject of charitable contributions directly by corporations (rather than by the individual shareholders), Vickrey is right in pointing out that this provides a guarantee to each shareholder that others are contributing also. One can distinguish between two types of psychology here, viz., "I would be happy to contribute this much if 1am assured that others would too" and "I would not like to contribute as much given the other shareholders' contributions, no matter what they 225 226 • ALTRUISM, MORALITY, AND ECONOMIC THEORY are, but I would be agreeable to contribute that much as a price for persuading the others to make similar contributions." From the formulation that Vickrey gives, emphasizing the role of the "assurance" that others would contribute, it would appear that he has the former type of interdependence in mind, whereas the latter type of interdependence-in the familiar "Prisoner's Dilemma" form-would also provide support for such a procedure. In fact, in the latter case the system of direct giving by corporations cannot be replaced by a voluntary agreement among shareholders; whereas in the former case it can be, since no one would have the desire to break the assurance given by each to the others (and an unenforced agreement would be an "equilibrium point"). Burton Weisbrod's interesting study of the equilibrium between the different sectors, and in particular his analysis of the relationships between the provision of public goods and that of substitute private goods, have emphasized the substitutability between classes of public and private goods. While he is concerned with developing a model "in which certain behavioral and organizational constraints limit public-sector activities and stimulate the voluntary sector," that is not necessarily the historical direction of causation. Frequently the inadequacy of private goods to meet a public need would lead to an eventual development of an appropriate public good when political and social charges permit such a development. The historical relationship between public and private sectors is indeed very complex, and Weisbrod's model concentrates, naturally enough, on a limited aspect of it. My main difficulty with Weisbrod's paper lies in the fact that it does not go much into operation of the voluntary sector. He demonstrates why a demand for voluntary supply may exist, but not how this is to be met since a "Prisoner's Dilemma" type of problem is present here. Weisbrod refers to the "free-rider problem," which is a special case of this, and points out that there are "pressures to donate" and also that people may actually enjoy giving. This is fine as far as it goes, but there is a need to explain the psychology of voluntary giving in circumstances where the "pressures" are weak. An explanation of giving in terms of enjoyment of giving could be tautological. In voluntary community services, or in the provision of labor in a commune, a complex interrelationship holds between each person's activities, his expectations of others' actions and his notions of his responsibility. Each person may prefer not to contribute given the contribution of others, leading to a classic "Prisoner's Dilemma" situation, but nevertheless an implicit moral code might rule out individual rationalistic calculations and produce a voluntary "equilibrium" involving appropriate actions. Comment • 227 Some of the political controversies of recent years, e.g., the Chinese debates on the...


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